Knit fabric usually stretches one way more than another. You definitely want to hang the fabric so the strongest grain is going up and down. You should be able to tell which grain is stretchiest by pulling the fabric both lengthwise and crosswise. For a knit fabric, I would think determining which way to hang it is more important than squaring it.
To square it, I think you need to lay the fabric out flat on a large surface (such as a floor, preferably a tile floor so that you have straight lines) and then use a large metal T-square (hardware stores sell them) to mark.
Edit: I do not have experience with draperies. Are you planning to pleat the fabric at the top? Are you planning on lining them? Are they going to be long or short? Just wondering.....